What is the role of a title company in the home buying process?

How to buy a home with a title company

The role of a title company in the home buying process is crucial, as it ensures a clear and legally valid transfer of property ownership from the seller to the buyer. The title company carries out a series of tasks to protect the interests of all parties involved, including the buyer, seller, and lender. Here are the main responsibilities of a title company during the home buying process:

Title search and examination

The title company conducts a thorough search of public records to identify any potential issues with the property’s title, such as liens, encumbrances, easements, or other ownership disputes. The title search helps to verify that the seller has the legal right to transfer the property and that there are no unresolved claims or restrictions that could impact the buyer’s ownership rights.

Title insurance

The title company issues title insurance policies to protect the buyer and lender against any future claims or losses resulting from undiscovered title defects. The owner’s title insurance policy safeguards the buyer’s investment in the property, while the lender’s title insurance policy protects the lender’s financial interest in the home.

Escrow services

The title company often serves as an impartial third party, known as an escrow agent, to facilitate the secure transfer of funds and documents between the buyer, seller, and lender. The escrow agent holds the earnest money deposit, down payment, and other fees until the closing, ensuring that all conditions of the sale are met before disbursing funds to the appropriate parties.

Preparation of closing documents

The title company prepares and reviews all necessary documents for the closing, including the deed, title commitment, closing statement, and any affidavits or disclosures required by law or the sales contract. The title company works closely with the buyer, seller, and lender to ensure that all documents are accurate and complete.

Coordination of closing

The title company coordinates the closing process, scheduling a date and time for the buyer, seller, and their respective attorneys or agents to sign the closing documents. The title company also confirms that all funds and documents are in order and that all conditions of the sales contract have been satisfied.

Recording and disbursement

After the closing, the title company records the deed and any other necessary documents with the appropriate local government office, such as the county recorder or registrar of deeds. The title company then disburses funds to the seller, lender, and any other parties entitled to payment, such as real estate agents or attorneys.

Post-closing services

The title company may also provide post-closing services, such as issuing the final title policy, retaining copies of the closing documents, and responding to any inquiries or concerns from the buyer, seller, or lender.


The title company plays a critical role in the home buying process by ensuring a clear and legally valid transfer of property ownership. The title company protects the interests of the buyer, seller, and lender by conducting a title search, issuing title insurance, providing escrow services, preparing and coordinating the closing, and handling post-closing tasks. Their services help to mitigate risks and create a smooth, efficient, and secure transaction for all parties involved.